Europe’s shifting pharmaceutical supply chain

Tuesday, July 10, 2012

More European pharmaceutical companies are turning to third-party logistics companies (3PLs) as a cost-cutting measure, according to a new report by healthcare specialists GBI Research.
GBI’s new report said there is concern, however, among companies about how to handle these outsourcing efforts. According to the report, direct-to-pharmacy (DTP) and reduced wholesaler agreements (RWA) are gaining prominence in the United Kingdom, but other European Union countries are largely pushing direct sales.
Some 772 full-line wholesalers in Europe supplied pharmaceutical products to pharmacies, hospitals and doctors in 2010, according to the European Association of Pharmaceutical Wholesalers. During 2010, overall sales turnover from 27 EU countries was valued at $180 billion. Parsing that out, the Institute for Pharmaeconomic Research said 703 million transactions took place between pharmaceutical full-line wholesalers, pharmacies, and manufacturers every year in France, Germany, Italy, Spain, the Netherlands, and the United Kingdom collectively.
The concern is that outsourcing and new distribution models like DTP and RWA are reducing the amount of full-line wholesalers in the United Kingdom. The losses of these wholesalers, GBI projects, will increase the number of overall pharmaceutical transactions to 97.9 billion a year in those same countries, which will cause more delays and transport spending. GBI said this will impact all facilities, including doctors that need certain medicines quickly.
GBI will be paying closest attention to Spain and the United Kingdom. A 2010 study found Spain’s market is 96 percent controlled by those full-line wholesalers, while the United Kingdom has the highest rate of DTP and RWA models as they account for around 25 percent of its market. GBI is looking to these to see if one model will cause more harm or if both can be considered viable in the changing times.
Access to the report can be found here. - Geoff Whiting